Friday, November 13, 2026

Who Really Makes Money on a Gallon of Gas?

  From Staff

Where your money goes and how taxes compare with profits

When you buy a gallon of gasoline, your money goes to more than the station at the corner. It pays for crude oil, refining, transportation, distribution, retail operations and government taxes. Several businesses may earn a profit along the way, but their entire share of the pump price is not profit.

One comparison is clear. Government generally collects more in fuel taxes per gallon than the local station keeps in fuel profit. Nationwide, federal and average state gasoline taxes totaled approximately 51.67 cents per gallon in January 2026, excluding local taxes. The convenience store industry association NACS estimates that a typical retailer keeps approximately 10–15 cents per gallon after fuel related operating expenses but before income taxes.

That does not establish that government collects more than all oil industry profits combined. Understanding the difference requires separating the purchase price into taxes, business costs and what remains as profit.

The U.S. Energy Information Administration divides gasoline prices into four main components. Crude oil, refining, distribution, marketing and taxes. Its national breakdown for 2025 assigned approximately 51.4% of the price to crude oil, 14.3% to refining, 17.8% to distribution and marketing, and 16.6% to taxes. Those percentages are rounded.eia

For a gallon costing approximately $3.10, those shares translate to roughly $1.59 for crude oil, 44 cents for refining, 55 cents for distribution and marketing, and 51 cents for taxes. The rounded amounts do not add exactly to $3.10. This is a historical national illustration not a current price quote or an accounting of a particular station’s sales.eia

The crude oil portion is the largest, but it is not all profit. It includes the costs of producing and supplying the oil, along with the producer’s earnings. The refining portion similarly covers the cost of turning crude into gasoline as well as refinery profit. Distribution and marketing cover moving, storing, selling the fuel, including the expenses and earnings of businesses along that route.eia

Calling those entire portions “profit” would be like calling a store’s total sales its owner’s take home pay.

The federal gasoline charge is 18.4 cents per gallon. That consists of an 18.3-cent excise tax and a 0.1-cent underground storage tank fee. State taxes and fees averaged another 33.27 cents per gallon in January 2026, producing a combined federal and average state total of 51.67 cents.eia

On a 20 gallon gasoline purchase, that benchmark represents approximately $10.33 in fuel taxes and fees before any applicable local taxes. The actual amount depends on the state, locality, purchase date and any temporary tax suspension.eia

These are fuel specific taxes. They are separate from income taxes, property taxes, payroll taxes and other taxes that businesses may pay. Nor should tax revenue be described as a business profit margin. It is government revenue collected under tax law.

The January 2026 tax figures and the 2025 pump price breakdown measure different periods. They provide useful context, but they should not be presented as an exact accounting of the same gallon.

A station’s markup is not the same as its profit.

NACS describes a typical gasoline markup of roughly 35–40 cents per gallon. From that amount, the retailer must cover expenses such as fuel delivery, credit card processing, equipment and fuel related store operations. Its illustrative estimate leaves approximately 10–15 cents per gallon before income taxes, although individual stations’ results vary.convenience

On a 20-gallon purchase, that amounts to approximately $2–$3 in fuel profit before income taxes. Compared with the national tax benchmark of about $10.33, combined government fuel tax collections are several times the retailer’s estimated profit.

The retailer’s profit is already included within the distribution and marketing portion of the gasoline price. It is not an additional charge on top of the price breakdown.eia

In South Carolina, gasoline carries a combined 47.15 cents per gallon in federal and state fuel taxes and fees. The federal portion is 18.4 cents. The state portion consists of a 28 cent motor fuel user fee, a half cent environmental impact fee, and a quarter cent inspection fee.

For a hypothetical $3 gallon purchased in South Carolina, 47.15 cents goes to those government charges. Using NACS’s typical retailer profit estimate, another 10–15 cents would remain with the station before income taxes. The remaining approximately $2.38–$2.43 covers all other supply chain costs and profits, including the station’s operating expenses.

That example does not assign a made up profit figure to an oil producer or refinery. The pump price alone does not reveal exactly what each business earned after paying its costs.

On a 20-gallon South Carolina gasoline purchase, government fuel taxes and fees total $9.43. The station’s estimated fuel profit would be approximately $2–$3 before income taxes.

The federal charge on on road diesel is 24.4 cents per gallon 6 cents higher than gasoline’s federal charge. Using EIA’s January 2026 average state diesel taxes and fees of 35.5 cents, the combined federal and average state amount was 59.9 cents per gallon, excluding local taxes.eia

The higher federal tax on diesel is tied in part to the greater highway costs associated with heavy trucks, which commonly use diesel fuel. Loaded trucks place much heavier loads on pavement through their axles than passenger cars, contributing more to pavement deterioration and the need for stronger roads and costly repairs. Federal highway studies have supported higher diesel taxes as one way to make heavy vehicles pay a larger share of those costs. The distinction is weight and axle loading not diesel fuel itself. A diesel passenger car does not cause the same road wear as a loaded tractor trailer, yet both pay the same federal diesel tax per gallon. That makes the higher fuel tax a broad highway funding tool rather than an exact charge for the damage each vehicle causes. fhwa.dot.gov

South Carolina charges the same state fuel tax and fee total on ordinary gasoline and on road diesel. That puts the combined diesel charge at 53.15 cents per gallon, compared with gasoline’s 47.15 cents.rfa.sc

These figures apply to ordinary on road fuel. Qualifying dyed diesel used in off road equipment receives different tax treatment and exemptions do not necessarily eliminate every applicable tax.dor.sc

State and local taxes can change the tax portion of the pump price substantially.

South Carolina does not add ordinary county or city sales taxes to highway fuel subject to its motor fuel user fee. That means a higher general sales tax rate in one South Carolina county does not automatically add another percentage to gasoline purchases there.scstatehouse

Georgia handles fuel differently. Certain local sales taxes apply to highway fuel and are collected through distributors using an official fuel price basis. Those charges can be passed along in the pump price.

Temporary state fuel tax holidays can further change comparisons, but suspending one tax does not necessarily remove local taxes or other charges. A meaningful comparison must use the taxes actually in effect at the location and time of purchase.

The answer depends on what “makes” means.

If it means the largest share of sales revenue, crude oil is the biggest component of the national gasoline price breakdown. But that share includes production costs, not just earnings.eia

If it means government fuel tax collections compared with the local station’s fuel profit, government generally receives more per gallon. The nationwide benchmark is approximately 52 cents in federal and average state taxes, compared with an estimated 10–15 cents in retailer profit before income taxes.

If it means government taxes compared with the combined net profits of every producer, refiner, distributor, and retailer, the standard price breakdown does not answer that question. It shows where the purchase price goes, but does not isolate every participant’s net earnings.eia

The clearest conclusion is this.Taxes take a substantial and identifiable portion of each gallon’s price, the local station usually keeps a relatively small profit.Most of the remaining money pays a mixture of oil industry costs and profits not profit alone.

Sources:

Gasoline prices: where the money goe

U.S. Energy Information Administration — Factors Affecting Gasoline Prices
Explains the four components of the pump price: crude oil, refining, distribution and marketing, and taxes. These are price components that include costs and profits—not separate profit margins.eia
https://www.eia.gov/energyexplained/gasoline/factors-affecting-gasoline-prices.php

Federal and state gasoline and diesel taxes

U.S. Energy Information Administration — How Much Tax Do We Pay on Gasoline and Diesel Fuel?
Provides federal tax rates and average state taxes and fees. Check the effective date when using the figures, because the page is updated periodically.eia
https://www.eia.gov/tools/faqs/faq.php?id=10&t=5

Gas-station markup and profit

National Association of Convenience Stores — Who Makes Money Selling Gas?
Explains the difference between a station’s markup and its estimated profit after expenses. This is the source for the article’s approximate 10–15-cent-per-gallon retailer-profit range. NACS is an industry trade association.convenience
https://www.convenience.org/stay-current/conveniencecorner/who-makes-money-selling-gas

South Carolina fuel taxes and exemptions

South Carolina Department of Revenue — Motor Fuel
Provides the state’s motor fuel user-fee information and associated fuel charges.dor.sc
https://dor.sc.gov/tax-index/motor-fuel

South Carolina Department of Revenue — Motor Fuel Requirements and FAQs
Covers exemptions, dyed diesel, and other fuel-tax rules.dor.sc
https://dor.sc.gov/tax-index/motor-fuel/motor-fuel-requirements-faqs

South Carolina Code of Laws — Title 12, Chapter 28
Contains the motor fuel user-fee law. Section 12-28-310 addresses the relationship between that fee and local taxes on motor fuel.scstatehouse
https://www.scstatehouse.gov/code/t12c028.php

Georgia’s local taxes on fuel

Georgia Department of Revenue — Calculating Tax on Motor Fuel
Explains how Georgia calculates motor fuel excise tax and prepaid local taxes.dor.georgia
https://dor.georgia.gov/taxes/motor-fuel-tax/calculating-tax-motor-fuel

Georgia Department of Revenue — Prepaid Local Tax Rates
Provides local-tax information for motor fuel used on highways.dor.georgia
https://dor.georgia.gov/sales-tax-rates-prepaid-local-tax-motor-fuel-highway-use

Heavy trucks, road wear, and diesel taxes

Federal Highway Administration — Highway Cost Allocation Study, Executive Summary
Explains how highway costs are attributed to different vehicle classes and compared with the user fees those vehicles pay.fhwa.dot
https://www.fhwa.dot.gov/policy/hcas/final/execsum.cfm

Federal Highway Administration — Equity and Efficiency of Highway User Fees
Discusses diesel taxes and other charges as ways to better align heavy-truck payments with their attributable highway costs. This is a historical policy study, not a current tax-rate source.fhwa.dot
https://www.fhwa.dot.gov/policy/hcas/final/six.cfm





Government data: prices, taxes, and costs

  • U.S. Energy Information Administration — Factors Affecting Gasoline Prices
    Explains the four main components of the pump price: crude oil, refining, distribution and marketing, and taxes. This supports the distinction between a company’s share of the selling price and its actual profit.
    https://www.eia.gov/energyexplained/gasoline/factors-affecting-gasoline-prices.php

  • U.S. Energy Information Administration — Gasoline and Diesel Fuel Taxes
    Lists federal fuel taxes and average state taxes and fees. Check the date shown on the page: it is updated periodically, so the figures may differ from the January 2026 benchmark used in the article.
    https://www.eia.gov/tools/faqs/faq.php?id=10&t=5

Gas-station margins and estimated profits

  • National Association of Convenience Stores — Who Makes Money Selling Gas?
    Explains the difference between a retailer’s markup and the amount remaining after operating expenses. This is the source for the article’s estimated station-profit range. NACS is an industry trade association, rather than an independent government statistical agency.
    https://www.convenience.org/stay-current/conveniencecorner/who-makes-money-selling-gas

South Carolina fuel taxes

Georgia’s local fuel taxes

These sources support comparing government fuel tax collections with estimated station level profit. They do not establish that government collects more per gallon than the net profits of the entire oil supply chain combined.







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Who Really Makes Money on a Gallon of Gas?

  From Staff Where your money goes and how taxes compare with profits When you buy a gallon of gasoline, your money goes to more than the st...